International Paper (IP)

Short-term

Turnover ratios

Based on the provided data for International Paper's activity ratios:

1. Inventory Turnover:
- There has been a consistent improvement in inventory turnover ratio over the years.
- The ratio increased from 7.01 in 2020 to 7.50 in 2024, indicating that International Paper is managing its inventory efficiently.

2. Receivables Turnover:
- The receivables turnover ratio data is not available for the years 2020 to 2024.
- This could be due to unavailable or undisclosed information regarding the company's receivables management.

3. Payables Turnover:
- Similar to receivables turnover, payables turnover data is not provided for the years 2020 to 2024.
- This makes it difficult to assess how effectively the company is managing its payables.

4. Working Capital Turnover:
- The working capital turnover ratio has shown fluctuations over the years.
- There was a significant increase from 2021 to 2022, reaching its peak at 11.96, and then decreased in the following years but remained relatively healthy.

Overall, while inventory management seems to be a strength for International Paper, the lack of data on receivables and payables turnover limits a comprehensive analysis of the company's working capital efficiency. The fluctuation in working capital turnover may require further investigation to understand the underlying reasons and continuity of operational effectiveness.

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Average number of days

Based on the provided data, we can analyze the activity ratios of International Paper as follows:

1. Days of Inventory on Hand (DOH):
- The trend in the days of inventory on hand shows a decrease from 52.06 days on December 31, 2020, to 48.68 days on December 31, 2024.
- This indicates that International Paper has been able to manage its inventory more efficiently over the years, holding less inventory relative to its sales.
- A lower DOH signifies that the company is turning its inventory into sales more quickly, which can lead to lower holding costs and improved liquidity.

2. Days of Sales Outstanding (DSO):
- The data provided does not include information on Days of Sales Outstanding for the years 2020 to 2024.
- DSO measures the average number of days a company takes to collect revenue after a sale is made.
- Typically, a lower DSO suggests that a company is efficient in collecting its accounts receivable, which indicates strong cash flow management.

3. Number of Days of Payables:
- Similar to DSO, there is no data available on the Number of Days of Payables for the years 2020 to 2024.
- Number of Days of Payables measures the average number of days a company takes to pay its suppliers.
- A longer period indicates that the company is taking longer to pay its bills, potentially improving its cash flow and working capital management.

In summary, based on the available data, International Paper has shown improvements in managing its inventory efficiently over the years. Further analysis on Days of Sales Outstanding and Number of Days of Payables would provide a more complete understanding of the company's overall activity ratios and working capital management.

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Long-term

The long-term activity ratios for International Paper demonstrate the company's efficiency in utilizing its fixed assets and total assets to generate revenue.

1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio has shown a consistent improvement over the years, increasing from 1.68 in 2020 to 1.95 in 2022. This indicates that the company is generating more revenue from its fixed assets each year.
- However, the data for 2023 and 2024 is not available, so the trend beyond 2022 cannot be determined.

2. Total Asset Turnover:
- The Total Asset Turnover ratio has also been on an upward trend, indicating that International Paper is becoming more efficient in utilizing its total assets to generate revenue.
- There was a notable increase from 0.65 in 2020 to 0.88 in 2022, highlighting the company's improved asset utilization.
- Although there was a slight decrease in 2023 and 2024, the ratio remains relatively stable, indicating that the company continues to effectively generate revenue from its total assets.

Overall, International Paper's long-term activity ratios suggest that the company has been successful in utilizing its assets efficiently to drive revenue growth, with a particularly strong performance in fixed asset turnover.